Polar Industries manufactures a commerical size refrigerator for restaurants and commercial kitchens. The commercial refrigerators are sold for $860. Selected data for the company's operations last year follow: 320 285 35 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ $ $ $ 135 355 30 15 $ 64,000 $ 27,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 245, 100 205,200 39,900 31,275 $ 8,625 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. What is the amount of the difference in net operating income between the two costing methods